Earnings season may deliver a wake-up call to Wall Street.
Stephen Roach, one of Wall Street's leading authorities on Asia, believes multinational corporations are largely underestimating the impact of the U.S.-China trade war on their bottom lines.
"Apple is probably the canary in the coal mine," the Yale University senior fellow said Monday on CNBC's "Trading Nation." "There's likely to be more to come."
Roach, who was Morgan Stanley Asia chairman for five years, sees the trade conflict with China as the biggest threat to the U.S. economy and markets. If a solution isn't achieved soon, Roach predicts more problems ahead.
"To think that what affects the Chinese has no bearing whatsoever on an otherwise resilient U.S. economy I think, is ludicrous," he said. "This is a two-way relationship. The U.S. depends heavily on China. It's our third largest and most rapidly growing export market over the last 10 years."
U.S. and Chinese officials on Monday began their first face-to-face talks in Beijing since a 90-day moratorium on raising tariffs was implemented in December.
Roach expects progress when it comes to agriculture and energy, but he doesn't see any material developments that would officially end the trade war.
"The deeper strategic issues on technology transfer, intellectual property protection, cyber hacking — I think the best we will see is just lip service on agreeing to discuss these," he said.
When it comes to ultimately achieving a material resolution, Roach predicts it will happen just before the March 2 deadline for the talks.
"These things usually go down to the wire," Roach said. "On the U.S., nothing gets done unless it's signed off by the president. And so it always remains highly uncertain to how he's going to come out, even after all these negotiations take place."